Use of Waivers and Exculpatory Clauses

Use of Waivers and Exculpatory Clauses Lecture 13.0 Summer 2008 SLS 4205 Dr. Richard M. Southall

Management Contexts,Relevant Laws, and Cases

Communicating with Sportand Recreation Participants • Use your communication mechanisms to convey and reinforce concern for welfare • Share information to make participation experiences better and safer • Use documents to avoid liability only as a secondary aspect

Brochures, Videos, andPromotional Materials • Involve an attorney as well as marketing/advertising employees • Consider the legal impact of words • Consider the effect language choice has on setting standard of care • Avoid any absolute assertions— liability may be incurred for breach of contract, fraud, or misrepresentation

In Your Role as Manager Promotional Materials • Realize that information exchange is a crucial part of your organization’s preventive law plan • Draft all documents to support your corporate culture and your goal of fostering the well-being of participants • Never promise “perfection” or a “perfectly safe activity” in advertising materials • Consult an attorney about language use

Exculpatory Agreements • Contract in which a person or entity legally at fault tries to excuse itself from fault • Exculpatory clause: • Relieves party from liability resulting from a negligent or wrongful act • Is usually in the form of a waiver or preinjury release

Waivers • One party gives up the right to sue another party • Court upholding waiver gives precedence to contract law over tort law • Upheld when two criteria are met: • Context (right circumstances) • Content (written properly)

Context of Waivers:Minority • Rules of contract law apply • Courts are divided about parent–child relationship and giving up a child’s right to sue (Cooper v. Aspen Skiing Co., Sharon v. City of Newton)

Your Viewpoint • How far do you think parental rights should extend regard decision making for their children? • Think about the issue from both the parents’ and the child’s perspectives.

Context of Waivers:Public Policy • Whether waiver can be used without violating public interest • Waivers may be disallowed or disfavored; federal law may supersede local • Federal policy requires “Visitor’s Acknowledgment of Risk” form in place of exculpatory agreement (continued)

Context of Waivers:Public Policy (cont) • Waivers during provision of essential services • Organizations with duty to serve public gain benefit of waiver use • Tunkl case: factors for public policy analysis • the court found that the agreement exhibited all of the characteristics set forth by the courts of the type of transaction in which exculpatory provisions would be held invalid, including the following: (1) the agreement involved an institution subject to public regulation; (2) the hospital's services to those who needed the particular skill of its staff and facilities constituted a practical and crucial necessity; and (3) the hospital held itself out as willing to perform its services for those qualified members of the public. • Interscholastic/intercollegiate sport as essential service (Wagenblast v. Odessa School District) • Nonschool sport and recreation as essential service (Seigneur v. National Fitness Institute)

Context of Waivers: Public Policy (cont) • Waivers and principle of unfair dominance • Disparity in bargaining power • Person participating has no choice regarding participation (Whittington v. Sowela Technical Institute) • The husband and the son argued that the school was independently, as well as vicariously, negligent. In affirming in part, the court held that the pre-trip release was against public policy and that the husband's remarriage was irrelevant to his damages, which were assessed as of the date of death. The court ruled that the trip was a school activity, the student who drove the van was the school's agent, and the school was also independently negligent.

Context of Waivers: Public Policy (cont) • Waiver as violation of statutory duty (Murphy v. North American River Runners) • he court reversed and remanded the decision of the circuit court because plaintiff's affidavit alleged a genuine issue as to material fact concerning the failure of defendant's guide to conform to the standard of care expected of members of his occupation. The court determined that plaintiff's complaint alleged that defendant's conduct was reckless and negligent. The general clause in the exculpatory agreement purporting to exempt defendant from all liability for any future loss or damage would not be construed to include the loss or damage resulting from defendant's intentional or reckless misconduct or gross negligence, unless the circumstances indicated that such was plaintiff's intention. The court concluded that extrinsic evidence was admissible to show the relation of the parties and the circumstances surrounding the transaction.

Content of Waivers • Terms must be conspicuous(Stokes v. Bally’s Pacwest) • Language: • Clear, unambiguous, explicit (Sweat v. Big Time Auto Racing) • Cannot exonerate for conduct beyond negligence (Moffatt v. Snow Creek)

In Your Role as Manager Waivers and Exculpatory Agreements • Consult attorney regarding your state’s requirements • Exculpatory clauses should be conspicuously within documents and use clear, unambiguous language • Do not use “group” release forms • Instruct employees to give adequate time to read and never say the waiver is “meaningless” or “just policy”

Agreements to Participate • In lieu of exculpatory agreement • Informs participant of risks of activity • Essential components: • Nature of activity • Expectations of participant • Condition of participant

In Your Role as Manager Agreements to Participate • Always use an agreement to participate—to share risk information • Have participants agree to follow the rules of conduct to make experience enjoyable and safe—also enables a comparative negligence defense

Use of Waivers and Exculpatory Clauses